Old Monk is selling at least a dozen of its 40 outlets to fund the expansion of its hugely successful Springbok sports bars.
The company, run by Gerry Martin, brother of Wetherspoon's Tim, is labouring under net gearing (debt to shareholders' funds) of 130%, which makes more borrowing difficult.
With new Springboks bringing in £30,000 a week, against £17,000 from the average Old Monk branded outlet, company strategy is now concentrating on opening more Springboks û and selling lower-performing outlets to pay for them.
The company currently owns 25 Old Monks, eight Springboks and seven pub/restaurants. Four bars are being sold to a management buy-out, while another eight managed houses have been offered as a block to other pub operators.
Old Monk regard opening more 1,000-plus capacity, South African-themed Springbok sports bars as the key to its future growth, especially after two new Springbok bars in Cheltenham and Manchester saw an average weekly turnover of £30,000 in the eight weeks after they opened.
Two weeks ago the company announced pre-tax profits up 62% to £638,000 in the six months to October 27 on sales of £14.7m, up 41%.
It wants to open anything between five and 10 new pubs a year in regional towns such as Bristol, Preston and Cambridge.
Old Monk's house broker, Collins Stewart, is predicting pre-tax profits of £2.5m and earnings of 6.7p in the current year to April, rising to £3.2m pre-tax and 8.6p of earnings in 2003, equal to earnings growth of 37% this year and 28% next. This would give the company a price-earnings ratio of 9, falling to 7.4 in 2003.
The company, run by Gerry Martin, brother of Wetherspoon's Tim, is labouring under net gearing (debt to shareholders' funds) of 130%, which makes more borrowing difficult.
With new Springboks bringing in £30,000 a week, against £17,000 from the average Old Monk branded outlet, company strategy is now concentrating on opening more Springboks û and selling lower-performing outlets to pay for them.
The company currently owns 25 Old Monks, eight Springboks and seven pub/restaurants. Four bars are being sold to a management buy-out, while another eight managed houses have been offered as a block to other pub operators.
Old Monk regard opening more 1,000-plus capacity, South African-themed Springbok sports bars as the key to its future growth, especially after two new Springbok bars in Cheltenham and Manchester saw an average weekly turnover of £30,000 in the eight weeks after they opened.
Two weeks ago the company announced pre-tax profits up 62% to £638,000 in the six months to October 27 on sales of £14.7m, up 41%.
It wants to open anything between five and 10 new pubs a year in regional towns such as Bristol, Preston and Cambridge.
Old Monk's house broker, Collins Stewart, is predicting pre-tax profits of £2.5m and earnings of 6.7p in the current year to April, rising to £3.2m pre-tax and 8.6p of earnings in 2003, equal to earnings growth of 37% this year and 28% next. This would give the company a price-earnings ratio of 9, falling to 7.4 in 2003.
